The two brothers arrested last week in an anti-terror raid on a house in east London, in which one was shot, were released without charge last night after police failed to find any link to an alleged biological terror plot.

However, the Metropolitan police said the intelligence which led to the raid last Friday was still being developed, adding that all lines of inquiry would be exhausted.

Mohammed Abdul Kahar, 23 and Abul Koyair, 20, maintained their innocence throughout their detention. They were released from Paddington Green high security police station shortly before 8:30pm after an extensive search of their house.

More than 250 police officers, some of them armed and wearing biochemical suits, burst into the house at 4am last Friday after receiving intelligence claiming that a chemical or biological weapon could be inside. During the operation, Mr Kahar was shot in the shoulder by a police gun. Police maintained that they had been left with "no choice" but to force entry into the home, because there was "very specific" intelligence of a threat to public safety.

Security sources said the timing of the raid was dictated by fears that an attack on a British target using an unconventional weapon could be soon be staged.

But as the week drew on, senior officers came under increasing pressure and were forced to concede that there may never have been such a weapon in the house.

The shooting of Mr Kahar will be investigated by the Independent Police Complaints Commission, which could take months to produce a report.

At the same time, the Met regards the investigation into the intelligence as an ongoing inquiry which may lead elsewhere, with the possibility of more raids.

The home secretary, John Reid, last night defended the police.

"The police are acting in the best interests of the whole community in order to protect the whole community, and they therefore deserve the support of the whole community in doing what is often a very hazardous and dangerous job often involving difficult decisions," he said.

Scotland Yard said the two men would be contacted so arrangements could be made for property to be handed back to them. It also said the police would undertake appropriate restoration work.

The Met's assistant commissioner, Andy Hayman, thanked the community for its understanding. "We have worked with the local community since the operation on Friday to keep them updated and have listened to their concerns." he said.

The two brothers were arrested under the Terrorism Act, and held on suspicion of the commission, preparation and instigation of acts of terrorism. Mr Kahar was held under armed guard at Royal London hospital in Whitechapel, as he recovered from his wounds. He was shot in the upper right hand side of his chest, with the bullet exiting through his shoulder.Azad Ali chair of the Muslim Safety Forum, which tries to improve relations between the Muslim community and the police, said officers should explain fully to the family what happened and apologise for the trauma they caused.

"The police have clearly made errors and they have to learn lessons," he said.

Earlier yesterday, the men's family foiled an attempt by extremists to hijack their protest against the police actions.

Around 35 men and 15 women attended a noisy demonstration opposite Forest Gate police station in east London organised by Anjem Choudary, formerly a close associate of the exiled cleric Omar Bakri Mohammed. Mr Choudary had said hundreds of angry Muslims would attend the protest once they had left their mosques after Friday prayers. But the brothers' family sent a statement to at least 20 mosques on Thursday evening which was read to worshippers during prayers yesterday afternoon, urging them to disassociate themselves from the event.

Mr Koyair and Mr Kahar's sister, Humeya Kalam, said the police raid represented "barbaric and horrific actions" but an extremist protest would "only give another opportunity for our community to be portrayed in a negative light".

Family thwart extremists' bid to hijack terror raid protest

The family of the terrorism suspect who was shot by police last week foiled an attempt by extremists to hijack their protest campaign yesterday.

Around 35 men and 15 women attended a noisy demonstration opposite Forest Gate police station organised by Anjem Choudary, formerly a close associate of the exiled cleric Omar Bakri Mohammed. Mr Choudary had said hundreds of angry Muslims would attend the protest once they had left their mosques after Friday prayers.

But the suspect's family sent a statement to at least 20 mosques on Thursday evening which was read to worshippers during prayers yesterday afternoon, urging them to disassociate themselves from the event.

Humeya Kalam, the suspect's sister, said the police raid represented "barbaric and horrific actions taken against an innocent family". But she said an extremist protest would "only give another opportunity for our community to be portrayed in a negative light".

"This will allow the police to inflict the same trauma that we have been through on another family," she said. "More brothers and sisters as a result could be arrested, which will have an adverse effect in proving both of my brothers' innocence." She urged those who wanted to protest to attend a "peaceful community demonstration" scheduled for next week.

The message was backed up by a cousin, Enam, who went to the edge of the demonstration to urge people to stay away.

Mohammed Abdul Kahar, 23, was shot in Forest Gate during the raid on his family home by police searching for a chemical bomb. His brother Abul Koyair, 20, was also detained. Both were arrested on charges connected with terrorism offences and are being held at Paddington Green high security police station.

During the demonstration, which saw protesters heavily outnumbered by police officers, Mr Choudary and other speakers castigated the police and the government for the shooting, and for the broader foreign policy in Iraq and other "Muslim lands". Mr Choudary led chants of "Muslims are innocent, Tony Blair is a terrorist", and accused prominent Muslim groups and individuals of failing the community, labelling them "sycophants".

Last week's raid, and the subsequent failure to locate any chemical device at the house, have put police and community relations under strain. On Thursday, Scotland Yard assistant commissioner Andy Hayman apologised for the disruption the operation caused; but he has also said the police had no choice but to carry it out.

Yesterday Sir Robin Wales, Newham's mayor, said he would seek the full facts from John Reid, the home secretary. But he also condemned outside agitators "stirring up division and fomenting unrest".